#Section 263 IT Act

The ITAT Ahmedabad affirmed that the Principal Commissioner can invoke revisional powers under Section 263 even after assessment is complete, if a subsequent DVO report proves the original valuation was materially understated, leading to significant revenue loss. This sets a critical precedent for tax authorities to act on credible post-assessment evidence that exposes deliberate or negligent undervaluation of capital assets.

The ITAT Surat has ruled that the Principal CIT cannot use Section 263 to reopen an assessment already concluded under Section 147 if the AO conducted a thorough scrutiny, accepted the assessee’s return, and no evidence of revenue loss was established. This reinforces that revisionary powers are not a substitute for proper reassessment and protects taxpayers from arbitrary re-litigation after full adjudication.

ITAT Bangalore has ruled that goodwill acquired in a slump sale qualifies for depreciation under Section 32, even if it arises from excess consideration over net assets, rejecting the revenue's argument that it is a self-generated asset. This clarifies that business acquisitions via slump sale are distinct from amalgamations and affirms the tax treatment of intangible assets in corporate restructuring, impacting M&A valuations and audit practices nationwide.

ITAT Agra rules that revisional powers under Section 263 cannot be invoked merely to substitute the Assessing Officer's reasoned view unless new evidence proves the assessment erroneous or prejudicial to revenue. The ruling protects assessees from arbitrary reopening of settled assessments based on mere differences of opinion.

ITAT Pune rules that the Commissioner's revisionary powers under Section 263 IT Act cannot be invoked to reassess depreciation on goodwill or warranty provisions already correctly allowed by the Assessing Officer. The ruling underscores that revisionary jurisdiction requires evidence of erroneous or prejudicial orders, not mere re-examination of settled claims.

ITAT Delhi quashes PCIT's revision under Section 263 for relying on incorrect appreciation of balance sheet entries and change of opinion, reinforcing that lack of inquiry-not inadequate inquiry-triggers revisionary powers.

ITAT Bangalore holds that Section 263 cannot be invoked merely because the Commissioner disagrees with a plausible view taken by the AO on interest income eligibility under Section 80P.